CSR MODEL OF PT AGINCOURT RESOURCES FOR ...

Global Journal of Arts Humanities and Social Sciences

Vol 4, No.9, pp.17-31, September 2016

Published by European Centre for Research Training and Development UK (www.eajournals.org)

17 ISSN: 2052-6350(Print), 2052-6369(Online)

CSR MODEL OF PT AGINCOURT RESOURCES FOR EMPOWERMENT AND REGIONAL

DEVELOPMENT IN BATANGTORU, SOUTH TAPANULI, INDONESIA

Arifin Saleh1,3

, Marlon Sihombing2, Rujiman

2, Agus Purwoko

2

1PhD Student, Postgraduate Program on Regional Planning (Perencanaan Wilayah), North Sumatera University

(USU), Medan, Indonesia 2Postgraduate Program in Regional Planning (Perencanaan Wilayah), North Sumatera University (USU),

Medan, Indonesia 3Lecturer (Dpk) Faculty of Social and Politic Science (FISIP), Muhammadiyah University of North Sumatera

(UMSU), Medan, Indonesia

ABSTRACT: Nowadays, Indonesia government makes a regulation or an obligation to every big companies to

share their profit at least 1% for every year to the people who live around the companies. It means that the

existence of the company should give a contribution for the society. The company should have responsibility to

every little activities created in the society. The contribution of the company is formulated in Corporate Social

Responsibility (CSR). CSR has some divisions namely: CSR in education, health, infrastructure, social, etc. PT

Agincourt Resources in one of the big company who operates in Batangtoru, South Tapanuli, Medan, Indonesia.

The operation of this company focuses on gold mine and has given some contribution to the society (CSR) in

education, infrastructure, health, etc.

KEYWORDS: CSR; Gold Mine; Education; Society

INTRODUCTION

Corporate Social Responsibility (CSR) can be defined as an act or draft conducted by the company according to

the ability of the company as a form of their responsibility towards the social conditions of the environment around

the location of the company (Rachman et al, 2011). CSR is an integral part to the company's survival. If companies

want to survive and be accepted in society, it must carry out CSR activities.

CSR activities are usually divided into three groups, namely CSR in social fields covering education, health,

cultural, religion, and social assistance. Then CSR in economics includes training of economic strengthening

families, increasing the family income, SME development, and CSR in job creation, as well as the field of

environment, for example, reforestation and maintenance of riverbanks.

Awareness of the company to carry out CSR activities is more exciting and more diverse. Implementation of CSR

in Indonesia increases both in quantity and quality. In addition to the diversity of activities and management

become more varied, judging from the amount of financial contribution will also increase. In 2011, the CSR funds

in Indonesia reaches more than Rp115 billion, or approximately US$ 115 million of the 180 companies. The funds

were spent on 279 social activities (Suharto, 2009),

In North Sumatra, CSR also receives special attention and becomes a topic of interest to be discussed. When there

is Council Development Plan (Musrenbang) of North Sumatra Province on April 2014, it is revealed that the

activities proposed development plan for the North Sumatra in 2015 uses funds sourced from CSR. It is given the

limitations of the state budget funds which is disbursed to North Sumatra while North Sumatra Province has





limited budget, as well as budget regencies/cities in North Sumatra to implement various development programs

needed by society. So CSR funds of various companies in North Sumatra is very expected. Some sectors of

development are expected to get help are infrastructure, regional development and environmental, social, cultural,

spatial, agricultural, marine and fisheries, plantation, animal husbandry, cooperatives and SMEs (Hutahaean,

2014).

Some companies in North Sumatra, both public and private, have been carrying out CSR, such as PT Bank of

North Sumatra, PTPN II, PTPN III, PT. Toba Pulp Lestari (TPL), and PT. Agincourt Resources (PT, AR).

Activities undertaken are quite diverse, eg scholarships, aid the construction of houses of worship, strengthening

the domestic economy, development of Small and Medium Enterprises, helping victims of natural disasters.

Gold mining company, PT. Agincourt Resources managing Martabe Gold Mine in District Batangtoru, North

Sumatra Province, has been implementing CSR.CSR of PT. Agincourt Resources in Batangtoru, South

Tapanuli, North Sumatra Province, is divided into three areas, namely aid in increasing social life, aid in the

economic field and assistance in the field of environmental preservation.

Figure 1.

CSR Model of PT Agincourt Resources in Batangtoru

Source: Saleh and Lutfi, 2011

METHODOLOGY

This study takes place in the District of Batangtoru, South Tapanuli, North Sumatra Province. It is as a location of

a gold mining of PT. Agincourt Resources (AR). This study focuses on 15 villages around the mine (villages

directly affected by mining). The fifteen villages are Hapesong Baru, Perkebunan Batangtoru, Telo, Wek I, Wek

II, Wek III, Wek IV, Napa, Aek Pining, Sumuran, Batu Hula, Sipenggeng, Bandar Hapinis, Hutaraja, dan Muara





Hutaraja. This study is conducted from February 2015 till May 2016. This study uses a mix of quantitative and

qualitative approaches. According to Creswell (2012), research is commonly known as joint research with the

dominant design approach is less dominant. This approach uses a combination of procedures and research analysis,

but one method is more dominant over the other methods. In this study, a quantitative approach is more dominant

than qualitative. This study will put forward the analysis and the result is quantitative rather than qualitative.

Quantitative data will be obtained from a questionnaire distributed to the study sample. While the qualitative data

obtained from observations and interviews with informants. In the quantitative approach, this research is the study

of causal relationships (causal effect), where research is conducted on the facts to prove empirically that the factors

of education, health, social assistance, strengthening the family economy, and infrastructure are a predictor for the

implementation of CSR from PT. AR. Factors human resources, infrastructure, relocation of residence is a

predictor for the development of the region Batangtoru South Tapanuli, and also to levels of education, quality

health facilities, availability of employment, the emergence of economic centers, availability of infrastructure,

improvement of family assets, increased income, ability to cooperate, and the ability to obtain the information and

communication, is a predictor for community empowerment Batangtoru South Tapanuli.

The research is also conducted to prove that the implementation of CSR affecting the development of the District

of Batangtoru, South Tapanuli and it also affects the community empowerment in Batangtoru, South Tapanuli

either directly or indirectly. Qualitatively, this research is descriptive-analytic study by way of describing it in

detail, systematic, and comprehensive information regarding all matters related to corporate social responsibility

towards regional development and community empowerment.

CSR and Theory of Triple Bottom Line As we know that, CSR concept develops rapidly, so there are many theories appeared regarding to CSR. One of

the famous concept is Triple Bottom Line developed by John Elkington in 1997 from his book “Cannibals with

Forks, the Triple Bottom Line of Twentieth Century Bussiness”. Elkington develops triple bottom line with three

terms: ecomoic prosperity, environmental quality dan social justice.

Figure. 2

Triple Bottom Line Model by Elkington, 1997

The population in this study is all households or families in 15 villages around the mine. From the data obtained,

the number of families in 15 villages as many as 5,086 families (Source: Statistics Coordinator Batangtoru District

of South Tapanuli, 2015). The sample is part of the population. Samples must be really depict or represent the





characteristics of the actual population. Metode used to determine the number of sample in this research is based

on the Slovin’s pattern ( Sevilla, 2007), yakni:

21 eN

Nn

................................................................................................. (4.1)

Where:

n: number of samples

N: Number of population

e: Maximum fault tolerance (error tolerance)

Referring to the formula, with n = 5086 and e = 5%, the number of samples in this study are:

3704349.37005.0086.51

086.52

n

Thus, the number of samples in this study are as 370 families dispersed representative in 15 villages around the

mine. They will serve as a sample to answer a series of questions in the questionnaire. Of the 370 families are then

determined the amount of each sample according to the level that is in each of the urban/rural basis proportionate

random sampling, using the formula:

nN

Nn i

i ..................................................................................................... (4.2)

Where:

ni: Number of samples of the urban/rural to -i; i = 1, 2, ..., 15

Ni: The population of the urban / rural to –i

n: number of samples

N: Number of population

Appropriate formula sample distribution can be seen in Figure 3 below:





Table1: Research sample per village/district

No Village/District Number of Families Sample

1 Hapesong Baru 645 47

2 Kel. Perk. Batangtoru 329 24

3 Telo 141 11

4 Kelurahan Wek III 210 15

5 Kelurahan Wek II 354 26

6 KelurahanWek I 305 22

7 Kelurahan Wek IV 306 22

8 Napa 389 28

9 Kelurahan Aek Pining 665 48

10 Sumuran 357 26

11 Batu Hula 171 12

12 Sipenggeng 236 17

13 Bandar Hapinis 262 20

14 Kelurahan Hutaraja 527 38

15 Desa Muara Hutaraja 189 14

Total 5.086 370

Source: Statistic Coordinator of Batangtoru dan Muara Batangtoru, Tapanuli Selatan, 2015

and has been modified, 2015.

Based on the operational definitions theories derived from the literature and empirical evidence the results of

previous research, it was determined indicators formative latent variable implementation of CSR which is divided

into five factors: (1) education, (2) health, (3) assistance social, (4) strengthening the family economy, and (5)

infrastructure. There are 35 items in the questionnaire used to measure the implementation of CSR. Respondents

are asked to indicate the level of agreement on a 5-point Likert scale, extending from a scale of 1 = strongly

disagree; 2 = a little disagree; 3 = disagree; 4 = agree; and 5 = strongly agree. Each statement is detailed in Figure

4 below.

Table 2: Sub-Variables and Indicator Variables implementation of implementation CSR (X) Sub-variable Indicator

Education (X1) 1. Implementation of CSR in education is in accordance with the needs of the community.

2. CSR in education providing scholarships and the establishment of the Regional Library.

3. Implementation of CSR in education must be communicated to the public.

4. CSR in education must be implemented unit or a specific area in the company or in the community.

5. Implementation of CSR in education must receive supervision from the public or other parties.

6. CSR in education can change attitudes or behavior.

7. CSR programs in education is regarded to be lacking or not maximized





Table 3: CSR Budget of PT. AR in Education

No Year Budget (Rp)

1 2011 404,994,800

2 2012 673,936,040

3 2013 1,666,454,670

4 2014 2,161,382,500

5 s/d Mei 2015 1,491,507,500

Source: Processed from ComDev information PT. AR, 2015

Implementation of CSR programs in education includes the provision of scholarships, construction of new

classrooms for some schools, the development of vocational high school of mines, the establishment of TBs

Children (TBA) and a car library, training, welding, basic computer, mechanical and electrical, internship

programs for pupils and students. Next, visiting schools, renovation of 22 schools, procurement of 500 seats for 18

school desks.

DISCUSSION

CSR Model of PT Agincourt Resources for Empowerment

Referring to the research and discussion that has been carried over, then the appropriate model for PT. AR in

implementing CSR programs for community empowerment in Batangtoru is as presented in Figure. 6 From the

figure, it is seen that CSR program PT. AR in community empowerment Batangtoru done through the development

of the region. Implementation of CSR programs involves education, health, social assistance, strengthening the

family economy, and infrastructure. Implementing CSR program must involve the cooperation of three parties: the

company, the community, and government.

Furthermore, the CSR program is directed to the development of the region in this regard include human resource

development, infrastructure development, and the relocation of residences. With the development of the region, the

empowerment of the people expected to be realized.





Figure 3: CSR Model of PT. Agincourt Resources for Empowerment

.

Community Response on the Implementation CSR of PT. Agincourt Resources

The response is often interpreted by the views, comments, or perception. Public response to the implementation of

CSR PT. AR can be seen from the tables presented in this subchapter. Description of the frequency and percentage

of South Tapanuli Batangtoru public response to the implementation of CSR gold mining company field of

education is presented in Table 6. The table shows that most respondents or as much as 56.5% stated their

agreement related to CSR program in education.





Table 4: Community Response to CSR Implementation of the Education Sector

Item

Respon

Strongly

disagree disagree

Less

agree agree

Strongly

agree

f (%) f (%) f (%) f (%) f (%)

CSR programs in

education is deemed

to be lacking or not

maximized

0 (0.0) 5 (1.4) 17 (4.6) 209 (56.5) 139 (37.6)

Source: Processed, 2016

Description: f - frequency; % - Percentage

Some respondents said CSR in education has helped people but still less than the maximum because there are many

other educational areas that need help from the company. A housewife who became respondents said children in

his village has a lot of assistance in the field of education. But he said that such assistance should continue until the

children finish their studies at least until the senior high school. Hamzah Siregar, community leader of Wek II

Village becoming one of the speakers in the study admitted that CSR education of PT. AR is already benefiting.

However, CSR education programs still needs to be improved.

Figure 4: CSR of PT Agincourt in Education





CONCLUSIONS

Based on the analysis of quantitative and qualitative results of hypothesis testing in the previous section, the

conclusions of this study are as follows: Implementation of CSR program PT. Agincourt Resources (AR) towards

community empowerment Batangtoru District of South Tapanuli, North Sumatra Province, implemented in several

areas, namely health, education and training, infrastructure, and local business development. Implementation of

CSR program PT. AR is still carried out by the company, in terms of budgeting and implementation of the

company through division community and community development.

Batangtoru community is already known CSR program by PT. AR and already feels the direct benefits of the

CSR program. But people assess program CSR PT. AR is not maximized and should be improved in community

empowerment. In carrying out CSR programs, the mining company should involves the community or community

groups. It is intended that the programs implemented really beneficial for the community and the community also

feels regarded as the subject of the perpetrator, not the objects that accepts and be targeted by CSR activities.

Implementation of CSR gold mining company PT. AR significantly gives positive effect on the development of the

District of South Tapanuli Batangtoru. Means Hypothesis 1 in this study may be accepted. This is evidenced by

regression weights for 0761 can be seen that the covariance between CSR Implementation gold mining company

PT. AR and the development of the District of South Tapanuli Batangtoru can be understood as an expectation for

development of the District of South Tapanuli Batangtoru which will increase at an average of 0.761 units for each

increase of 1 unit on the implementation of CSR gold mining company PT. AR. Standardized regression weights

for 0872 on the path of implementing CSR gold mining company PT. AR to the development of the District of

South Tapanuli Batangtoru was statistically significant (p <0.001), which means that if the implementation of CSR

gold mining company PT. AR increased by one standard deviation, the development of the District of Batang Toru

Tapanuli Selatan rise by 0872 the standard deviation.

Implementation of CSR gold mining company PT. AR significantly gives positive effect on the community

empowerment Batangtoru District of South Tapanuli. Means Hypothesis 2 in this study may be accepted. It was

proven that the path of implementation of CSR gold mining company PT. AR to community empowerment

Batangtoru District of South Tapanuli which has a weight of regression for 0511 can be understood as an

expectation which the development of the District of South Tapanuli Batangtoru will increase at an average of

0.761 units for each increase of 1 unit on the implementation of CSR gold mining company PT. AR from the

average by holding the development of the District of South Tapanuli Batangtoru currently on average.

Standardized regression weights for 0584 on the path of implementing CSR gold mining company PT. AR to

community empowerment Batangtoru District of South Tapanuli was statistically significant (p <0.001), which

means that if the implementation of CSR gold mining company PT. AR increased by 1 standard deviation by

holding the development of the District of South Tapanuli Batangtoru constant, the community empowerment

District of Batang Toru Tapanuli Selatan rise by 0584 the standard deviation.

Development of the District of South Tapanuli Batangtoru significantly gives positive effect on the community

empowerment Batangtoru South Tapanuli. It means the third hypothesis in this study may be accepted. It is shown

from the regression weights for 0703 on the path of development of the District of South Tapanuli Batangtoru to

community empowerment Batangtoru District of South Tapanuli.





It is seen from the magnitude of the indirect effect of the implementation of CSR gold mining company PT. AR

community empowerment Batangtoru District of South Tapanuli through the intermediary of the development of

the District of South Tapanuli Batangtoru is the product of standardized regression weights on the path of

implementing CSR gold mining company PT. AR to the development of the District of South Tapanuli Batangtoru

with standardized regression weights on the path of development of the District of South Tapanuli Batangtoru to

community empowerment Batangtoru District of South Tapanuli, ie 0872 × 0813 = 0709. This value is greater than

the standardized regression weights for 0542 on the path of implementing CSR gold mining company PT. AR to

community empowerment Batangtoru District of South Tapanuli, which indicates that the development of the

District of South Tapanuli Batangtoru significantly mediates the effect of the implementation of CSR gold mining

company PT. AR to community empowerment Batangtoru District of South Tapanuli. Furthermore, the total effect

of the implementation of CSR gold mining company PT. AR community empowerment Batangtoru District of

South Tapanuli is the sum of the amount of the indirect effect of the implementation of CSR gold mining company

PT. AR community empowerment Batangtoru District of South Tapanuli through the intermediary of the

development of the District of South Tapanuli Batangtoru and standardized regression weights on the path of

implementing CSR gold mining company PT. AR to community empowerment Batangtoru District of South

Tapanuli, ie 0709 + 0584 = 1292. The total amount of this effect indicates that if the implementation of CSR gold

mining company PT. AR increased by 1 standard deviation by allowing the development of the District of South

Tapanuli Batangtoru varies (does not hold constant) the empowerment of communities Batangtoru District of

South Tapanuli Regency will increase by 1.292 standard deviations.

CSR models are suitable for PT. AR in community empowerment is to track the development of the region,

including increased infrastructure construction, relocation of residences, and the improvement of human resources.

CSR program managers must involve an element of society, government, and the company itself. This model is

feasible because so far, the model CSR PT. AR, still apply directly targeted to community empowerment. So, with

this model PT. AR advance a program of regional development. Hopefully, with the regional development

program, the empowerment of the community will be more effective or more quickly achieved.

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